Proposed Rule Would Impact ERISA Plans

Over 50 million people and 34,000 benefit plans could be impacted by a U.S. Department of Labor (DOL) proposed rule published last week. In its current form, the proposed rule would fundamentally alter procedures for disability benefit claims under ERISA-covered plans.

Hot on the heels of other controversial DOL rules, like a recent one defining “fiduciary,” the latest proposed rule would infuse ERISA disability plans with claims-review standards first seen in the Affordable Care Act, including:

  • Greater focus on conflicts of interest for disability benefit claims administrators;
  • A requirement for detailed decisions with specific reasons for claim denials, especially where a decision is contrary to medical opinions or Social Security Administration determinations;
  • Vastly expanded “rights” for claimants in reviewing and responding to adverse decisions, which are contrary to federal-court decisions in several circuits;
  • New rules on “deemed exhaustion” of relief;
  • Rescission remedies under ERISA Section 503, even where the claimant is not currently receiving benefits or harmed;
  • A requirement that information be provided in a “culturally and linguistically relevant” fashion, which would require some level of interpretation services in 255 counties; and
  • “Technical changes,” including the resolution of a disagreement between federal appellate court circuits with respect to a statute of limitation for filing in court.

The proposed rule includes a 60-day comment period. Until then, it is unclear when and if the rule will go into effect. MSEC will publish more information as it becomes available.